*

To return 'large portion' of sale proceeds to shareholders

*

Panmure says price tag at the top end of market

expectations

*

Deal expected to close in second half of 2026, pending

approvals

(Adds shares and analyst comment in paragraph 2, background and

details throughout)

Dec 3 (Reuters) - Britain's Smiths Group ( SMGKF ) said

on Wednesday it had agreed to sell its Smiths Detection unit,

known for its baggage-screening kit in airports and explosive

detectors, for 2 billion pounds ($2.65 billion), including debt,

to private equity firm CVC Capital.

Shares of the FTSE-100 engineering group rose more than 3% in

early trade. Panmure Liberum analyst Alexandro da Silva O'Hanlon

said the price tag was at the top end of the 1.3 billion to 2

billion pound range expected by the market.

Originally known for precision watches and speedometers,

Smiths Group ( SMGKF ) is streamlining its business to focus on industrial

technologies through its John Crane and Flex-Tek businesses

after pressure from U.S. activist investor Engine Capital in

January to break up the conglomerate.

The deal, combined with the sale of Smiths Interconnect in

October, completes an overhaul that will leave the 170-year-old

company concentrated on flow management and thermal solutions

serving energy, industrial and construction markets.

Smiths Detection, the company's second-largest division,

generated revenues of 963 million pounds and headline operating

profit of 122 million pounds in the fiscal year ended July 31.

The company expects to receive net cash proceeds of about 1.85

billion pounds after adjustments, and will return a "large

portion" to shareholders.

Airports globally have been upgrading their screening

technologies, with government-mandated rollouts of Computed

Tomography Scanners, which provide 3D imaging and allow

passengers to carry liquids up to 2 litres and keep electronics

in bags, speeding up security checks.

Smiths Group ( SMGKF ) expects the deal to close in the second half of

2026, pending regulatory approvals and completion of

consultations with the works council at Smiths Detection France.

Barclays was sole financial adviser to CVC, while Goldman

Sachs ( GS ) and J.P. Morgan acted as joint financial advisers to

Smiths Group ( SMGKF ).

($1 = 0.7549 pounds)